Annual Report 2017  2017 Online Report  Private Sector Impact

MOBILIZATION:

Creating Platforms to Accelerate Development

IFC client CIPREL hires many students from this vocational school in Côte d'Ivoire.

Ending poverty is an expensive undertaking: the gap between what is needed and what is available amounts to trillions of dollars each year.

That is why the private sector must be involved. IFC plays a critical role in building the platforms and creating the opportunities for the private sector to accelerate development. We mobilize capital from banks, sovereign funds, and international financial institutions. By putting private capital to work, we achieve far greater development impact than we could on our own.

IFC mobilizes funds through two major platforms. The first, IFC Asset Management Company, manages $9.8 billion in assets through 13 investment funds, including $2.3 billion from IFC. The second, our loan-syndications program, has mobilized more than $62 billion from more than 500 financing partners for projects in emerging markets since its inception in 1959. At the end of FY17, our syndications portfolio totaled $16 billion.

In FY17, IFC mobilized nearly $7.5 billion for investment in developing countries—including more than $1.2 billion through public-private partnerships. We also created several multibillion-dollar platforms for private investors to join us to address the most urgent development challenges of our time.

This year, we launched the world’s biggest green-bond fund dedicated to emerging markets. The $2 billion Green Cornerstone Bond Fund is aimed at unlocking private funding for climate-related projects. IFC partnered with Amundi, Europe’s largest listed asset manager, to create the fund. IFC intends to invest up to $325 million, which the fund will use to buy green bonds issued by banks in developing countries. Amundi will raise the rest of the $2 billion from institutional investors worldwide.

We also introduced MCPP Infrastructure, a pioneering initiative to mobilize up to $5 billion from insurance companies and other institutional investors for investment in infrastructure projects in emerging markets. The effort builds on the success of IFC’s $3 billion Managed Co-Lending Portfolio Program, a loan-syndications initiative that enabled third-party investors to participate passively in IFC’s senior loan portfolio.

In another significant step forward, we launched the IFC Emerging Asia Fund, whose partners include a number of high-quality institutional investors. The fund, which is managed by IFC Asset Management Company, will make equity and equity-like investments across all sectors in emerging markets in Asia.

IFC is increasingly using a promising tool—blended finance—to unlock private capital. Private investors often avoid projects that involve untested approaches—or are in markets perceived as too risky. Blended finance entails using small amounts of concessional donor funds to mitigate specific investment risks, opening the door to far greater sums of private investment. In FY17, we used $188 million of donor funds to catalyze $726 million in private investment.


 

CREATING MARKETS,
CREATING OPPORTUNITIES

Green Cornerstone Bond Fund


We launched the world’s first green-bond fund dedicated to emerging markets.